Bluegrass Beacon: Executive-orders weapon a two-edged sword that cuts Kynect both ways

BluegrassBeaconLogoGov. Steve Beshear in July 2012 issued an executive order creating Kynect, a state-run health insurance exchange heavily dependent on federal subsidies.

Gov.-elect Matt Bevin in the 2015 gubernatorial campaign promised to undo – also by executive order – programs created by the misnamed Affordable Care Act, calling it “a disaster for Kentucky’s taxpayers.”

Beshear created Kynect by executive fiat out of frustration with the failure of the politically gridlocked legislature to climb aboard Obamacare’s train as it huffed and puffed through the Bluegrass State.

Legislators’ concerns – members of both parties wanted to slow that train down – have again been confirmed with the recent announcement by the Kentucky Health Cooperative, Kynect’s largest insurance provider, that it’s shutting down.

The co-op, which has sold 75 percent of the policies on Beshear’s exchange, is closing down after losing $50 million last year – the most of any of the 22 Obamacare-subsidized co-ops nationwide.

Kentucky Republican and Senate Majority Leader Mitch McConnell effectively drove home the point about how this failure overlaps the entire Obamacare debacle in causing real harm to real people.

Referencing the most-deceptive statement ever – and repeatedly – made about federal health-care reform by President Obama himself that “if you like your health care plan, you keep your health care plan,” McConnell noted that the 51,000 Kentuckians losing their plans because of the co-op’s shutdown “may now be losing the health insurance they had and liked twice within the past three years because of Obamacare’s failures.”

Beshear waves the protests aside, claiming it’s really not a big deal since those obtaining insurance through the cooperative still have multiple choices between insurers on the exchange.

But what if they want to keep their existing plan?

Only minor surgery on this policy is required to discover: Obamacare is an absurdly schizophrenic scheme that both forces people who don’t even want a plan to purchase one or face IRS penalties while at the same time causing people to lose plans they had and liked.

It’s also an unsustainable policy.

How many businesses, for example, could bleed at the rate of the co-op and keep their doors open?

It’s an uncertain policy, especially in terms of the federal government’s failure to keep its promise to prop up plans – like the soon-to-be-defunct Kentucky co-op, which bled cash while funding claims of previously uninsured – and unhealthy – clients who rushed to the doctor’s office after obtaining a Kynect card.

The feds, which pledged to assist state exchanges forced to pay out far more in claims than originally anticipated to cover these losses, sent less than $10 million of the $77 million expected by the Kentucky co-op.

Not even the co-op’s steep premium increases during the past two years could plug such a gap.

Allow for the fact that no federal bailout money will be provided to Kynect after 2016 – resulting in Standard and Poor’s conclusion that Kynect is in serious financial trouble – and the wisdom of legislators wanting to move slower is justified.

Considering all but one of Kynect’s insurers hiked premium rates this year and a Families USA report indicating one in four people with insurance plans purchased through government-operated exchanges skip doctor’s visits and important medical tests because of struggles to pay premiums and high deductibles – with the number being closer to one in three among poorer enrollees, Bevin’s assessment on the campaign trail that Obamacare is a “disaster” is more than defensible.

Finally, the likely unconstitutionality of a unilateral executive order creating a government program involving taxpayer expenditures – which, gridlocked or not, remains the legislature’s prerogative – means Beshear’s successor has an airtight case, arguably even an obligation, to rid the commonwealth of the Kynect disaster.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Where would you go to get advice about how to teach science?

The Courier-Journal ran an Op-Ed a couple of days ago about “Why teachers embrace Kentucky science standards.” It was written by a teacher from Boyd County.

The article says “Boyd County serves as a model – and hopefully a catalyst – for other district and school leaders.”

If so, we might be in trouble.

Boyd County’s 2014-15 results on the EXPLORE Science test for eighth graders were pretty bad. According to the district’s Kentucky School Report Card (Access all report cards here), in 2014-15 only 9.9 percent of its students scored at or above the EXPLORE Science Benchmark Score that shows students are on track in this area as of that grade. Statewide, the same report shows 15.3 percent of the students reached the EXPLORE Science Benchmark.

Even worse, the school district’s 2011-12 Kentucky School Report Card shows only 12.5 percent of Boyd County’s students met the EXPLORE target in science in that year. So, the district’s already very low EXPLORE scores DROPPED between 2011-12 and 2014-15!

The district did somewhat better in PLAN science (for 10th graders), but the percentage meeting the PLAN Science Benchmark Score in 2014-15 was still only 19.9 percent, two points below the statewide average of 21.9 percent. Of course, those 10th grade students spent a much smaller proportion of their school years in NextGen Science influenced classrooms than the eighth grade students did and thus provide less insight into the performance of the new education programs.

In any event, if I were going to look for advice on how to do science better, I don’t think I’d start with a school system where fewer than one in ten eighth grade students pass muster.

Bluegrass Beacon — Right-to-work: ‘Morning again’ or the sky is falling?

BluegrassBeaconLogoRight-to-work policies allow workers at privately owned companies the freedom to forgo paying union dues if they don’t agree with how their hard-earned money is being spent.

Giving Bluegrass State workers this leverage likely would result in more dues monies devoted to supporting local workers and less on extremist politicians a long way from Kentucky and programs that clash with the views and values of many Kentuckians – union and non-union alike.

According to federal Department of Labor filings, the UAW Local 2164 at the General Motors Corvette Plant in Bowling Green spent just 2 percent of its $560,000 budget on representation of its local workers in 2013.

And they’re not alone in spending very little of their members’ dues monies on contract negotiations or handling grievances while forking over a lot of cash for big-government political and social causes.

Boilermakers Local 107 in Brookfield, Wisconsin, spent just 5 percent of its $2 million budget in 2013 on representational activities. Machinists Lodge 2515 in Alamogordo, New Mexico, disbursed 23 percent of its $645,000 budget on representational activities – nearly all of which constituted payments to its officers.

Where’s the money going?

According to, the AFL-CIO in 2014 contributed more than $8 million nationally to political candidates and spent $5 million championing particular causes like the controversial pro-abortion Planned Parenthood organization.

Such spending habits make sense considering AFL-CIO president Richard Trumka’s naked admission that he got into the labor movement because he “saw it as a vehicle to do massive social change.”

But what if some union members’ views and values are different from Trumka’s? Should they still be forced to fund those efforts?

Or, what if they think dues monies should actually be used for representing workers rather than “social change?” Should they still be forced to pay dues?

Local 2164 president Eldon Renaud disingenuously berated Warren County Fiscal Court members who supported a right-to-work ordinance passed in December, accusing them of not standing up for a local company even as his union spends only 2 percent of dues monies representing its workers while sending the rest to Washington and other far-away places to fund political candidates and causes many of Renaud’s own members likely don’t support.

“If you can’t support the organization that’s supporting you, it’s gonna fall apart,” Renaud demagogued during Warren County’s right-to-work debate.

Not only has nothing fallen apart in any of the 25 states that have right-to-work policies – except, perhaps, some of the control previously held by labor-union big shots – but many union leaders actually are more responsive to members because they now must work to retain their involvement and dues payments.

Perhaps that’s why union membership is growing, even in right-to-work states. Workers now feel they have a real say in how dues monies are spent and also see their union representatives more than once every three years at contract-renegotiation time.

Another indication the sky’s not falling is the fact that, as reported by the Michigan-based Mackinac Center for Public Policy, there’s been a 66-percent drop in the number of Michiganders who are jobless since their state’s unemployment rate dropped from its whopping 14.9 percent in June 2009 to 5 percent this October.

Vincent Vernuccio, the Mackinac Center’s director of labor policy, points to Bureau of Labor Statistics numbers showing that not only did the state’s employment levels grow by 141,900 between March 2013 and December 2014, but average wages in the private sector rose by 3.2 percent.

“Michigan has seen the largest drop in unemployment in the nation – job growth is up, wages are up, property values are up and unemployment is down,” Vernuccio said. “It’s morning again in Michigan – and worker freedom played a big part of that.”

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at

Achievement gaps: Is a key Kentucky legislator finally getting it?

Rep. Derrick Graham, D-Frankfort, chairman of the Kentucky House of Representative’s  Education Committee and co-chairman of the Interim Joint Committee on Education, is worried.

Graham addressed his concerns about the Bluegrass State’s chronic education-achievement gaps to colleagues during the Nov. 17 meeting of the Kentucky Legislature’s Education Assessment and Accountability Review Subcommittee.

Graham says the legislature needs to act, and we agree.

However, Graham until now has refused to consider some of the most promising ideas to address these gaps, including school-choice options like charter schools. Despite growing evidence that charter schools are particularly beneficial to minority students — as demonstrated by these great stories from Atlanta and New Orleans – Chairman Graham has blocked consideration of charters and other choice programs in his House Education Committee.

As Graham notes, time is running out. Kentucky in April celebrated the 25th anniversary of passage of the Kentucky Education Reform Act of 1990 (KERA). Despite the massively increased funding and attention that KERA brought to the commonwealth’s traditional public-school system, the gaps remain a serious problem a quarter-century later, and Graham knows it.

And, as recent test results such as those from the EXPLORE and PLAN testing in Kentucky show, the gaps are getting worse.

[Read more...]

State Business Tax Climate: Even Illinois does better than Kentucky

Even with this overly-generous assessment of Kentucky’s business tax climate, five of the commonwealth’s seven neighboring states still rank higher, including Indiana at No. 8:


Lexington’s proposed fiscal folly: What you can do to stop a 39-percent minimum-wage hike

The Lexington-Fayette Urban County Council apparently plans on moving ahead with a vote this Thursday, Nov. 19, that could force a whopping 39-percent wage increase on small businesses by raising the city’s minimum wage from the current $7.25 per hour to $10.10 per hour.

What can you do to stop this nonsense?:

• If you are a Lexington resident, contact your representative on the council and tell them you oppose a minimum-wage increase.

• Send an email to all councilmembers at once by emailing

• Attend the next Lexington-Fayette Urban County Council meeting this Thursday at 6 200 E. Main St., Lexington, KY 40507

• Sign up to speak at the meeting, especially if you’re student or business owner who will affected by this fiscal folly

• Click here and here to read Bluegrass Institute statements and columns opposing this move by some on the Urban County Council.

• Click here to join “Stop Lexington’s ‘minimum wage’ tax increase,” a Facebook site created to share information and strategy.

If passed by the council and signed by Mayor Jim Gray, it would give Lexington the highest minimum wage of any city in Kentucky. Louisville raised its minimum wage to $9 an hour in December. However, the move is being challenged in court.

Business Lexington reported that Kentucky Retail Federation president Tod Griffin claimed a minimum-wage increase “was among the top five concerns” of respondents to a recent survey of the federation’s members.

“While many are already paying well over the current minimum wage, increasing the entire wage scale would certainly have a financial impact on the business community,” Griffin said.

Homebuilder’s road-building proposal saves taxpayers billions, relieves congestion and drives economic development in NKy

cincyeasternbypass_weblogoIn another example of how the best ideas don’t originate in the halls of government, Northern Kentucky homebuilder Henry Fischer has offered an alternative to transportation bureaucrats’ plans for I-75 in Greater Cincinnati and Northern Kentucky.  That alternative is the Cincy Eastern Bypass (see map here).

The plan being pushed by the OKI (Ohio, Kentucky and Indiana) Regional Council of Governments would cost nearly $5 billion – much of which would be funded in the form of tolls on Northern Kentuckians who cross the Ohio River on I-75/71.

OKI’s $5 billion plan:

  • adds only one thru lane to I-75 in Greater Cincinnati;
  • spends $2.6 billion of Kentucky money to add only 1 thru lane to the northern 19 miles of I-75/71 in Northern Kentucky (money Kentucky doesn’t have);
  • charges substantial tolls on the Ohio River crossing, thus tolling interstate commerce and harming the Northern Kentucky economy;
  • provides little or no opportunity for regional economic growth;
  • keeps all of the 18-wheelers on I-75/71, clogging this important transportation artery;
  • does nothing to improve traffic flow on I-71 and I-275, which are also heavily congested.

The Cincy Eastern Bypass proposal:

  • will cost only one-fourth as much as the OKI plan;
  • adds only six miles to the I-75 trip through Greater Cincinnati. It will actually save substantial travel time for these travelers;
  • offers all those 18 wheelers going through Cincinnati on I-75, I-71 and I-275 a safer, faster route;
  • opens one lane of I-75/71 thru Greater Cincinnati for local traveler use. It also opens up I-275 and many eastern Cincy highways.
  • opens up tremendous economic growth opportunities in Northern Kentucky and in Clermont and Warren Counties in Ohio;
  • will cost Kentucky only $500 million, compared to OKI’s $2.6 billion Kentucky cost. In addition, it adds the same one thru-lane capacity to I-75/71 in Northern Kentucky.

How will the Cincy Eastern Bypass add one lane of capacity to I-75/71? It will accomplish this one-lane addition by traffic diversion, especially by diversion of Cincinnati regional thru traffic.

OKI itself says that approximately one-fourth of the traffic crossing the Ohio River on I-75/71 is regional thru traffic. Regional thru traffic does not stop in the Cincinnati Region.

Half or more of this regional thru traffic is 18-wheeler trucks. Diverting one-fourth of the traffic around the region is about equivalent to opening up one lane of capacity along I-75—the same added capacity as OKI’s $5 billion plan.

The Cincy Eastern Bypass is obviously a superior solution to the $5 billion OKI plan. It is a simple concept — one that our transportation bureaucrats fail to grasp.

Read more in this four-page publication about how Fischer’s proposal would save tax dollars and build on the economic-development strengths of one of Kentucky’s primary economic engines: Northern Kentucky!

Does Common Core hurt minority students the most?

Fox News has picked up a story we started here some time ago.

It is a serious question: Does Common Core hurt minority students the most?

Is someone hiding Kentucky’s test scores?

Education Week just published a major article about the results of Common Core testing in all the states 2015.

Except: They didn’t post Kentucky’s 2015 results even though the scores were publicly released over six weeks ago on October 1, 2015.

I wonder why the Bluegrass State’s 2015 results never made it to EdWeek. Maybe this, this, this, this, this, this, this, this, this, and especially this will help you understand why.


I got a note from Andrew Ujifusa at Education Week that reconfirmed my already strong impression of the quality of reporting at that news organization. He admitted the omission of Kentucky’s 2015 scores was his mistake due to an update apparently not taking in their editorial software. He corrected the omission and says the 2015 scores do indeed look flat to him, as well.

Bluegrass Beacon: Bethlehem’s star passed through Frankfort before settling over Louisville on Election Night

BluegrassBeaconLogoAs part of his embarrassing Election-Night meltdown that’s garnering national attention, House Speaker Greg Stumbo, D-Prestonsburg, encouraged Democrats to find a Republican to thump over the head with a Bible the next morning.

After admitting he didn’t know whether Jesus was a Democrat or Republican, Stumbo astutely observed “Mary did not ride an elephant into Bethlehem that night” before calling on fellow partisans at the Frankfort Convention Center to “get up with me in the morning” and “go to the church and challenge those people about values and morals and talk about the things that this party was built upon.”


It was desperate and very different from what happened – and didn’t happen – in Louisville where Gov.-elect Matt Bevin called on supporters to “take the high road” and “reach out to somebody you know was on the other side of this particular battle, this particular political equation.”

The difference might offer clues about why Bevin crushed Stumbo’s Democratic Party, winning 106 of 120 counties with an 85,000-vote margin.

It also indicates why the GOP is experiencing the kind of momentum for the 2016 campaign for House seats that the Kansas City Royals experienced beginning about the seventh inning of every World Series game – no matter how far behind they were.

Still, I find common ground with Stumbo on a couple of statements.

First, he said “there’s a dawn tomorrow that’s going to be brighter and better and bigger and more hopeful than maybe anything we could” before garbling the rest of his sentence.

I agree with the understandable part.

It’s as if Kentuckians are stirring out of a long slumber and beginning to regain the realization that they – not government, politicians, bureaucrats or lawyers – are constitutionally empowered and really can determine their own destinies.

I saw that in Shelbyville right before the election, where citizens filled their city council’s meeting room to protest a proposed 3 percent restaurant tax.

Restaurant owners along with other merchants and citizen-taxpayers of all political stripes came together and caused the proposed tax – scheduled for a final reading that night – to disintegrate right in front of us.

Like the mountains in Stumbo’s eastern Kentucky enclave, it’s a beautiful site to witness people using their power – especially when doing so fully annoys arrogant politicians and unelected bureaucrats trying to extract yet more money from the same hardworking taxpayers they’re called to serve rather than exploit.

The council heard from people who woke up and said: “It’s a new day. We’re taxed enough already; besides, we don’t even know what the revenue from this tax will be used for. All we know is that it will be some ‘tourism-related’ project.”

City council member Bobby Adriot had the audacity to claim that half the revenue raised would “go to the council and half would be tourism’s money,” referring to a likely illegal deal made by the council to split the monies in half with the local tourism commission.

State law requires all restaurant-tax revenue be used only for tourism-related projects.

“It’s your money,” the council member said at one point to the tourism-commission’s representative.

Uh. No sir, it’s not. It’s not her money, and it’s certainly not some unelected tourism-bureaucrat’s money.

It’s the people’s money, and you have no right to take it away from them – especially when no one even knows how it will be spent.

Second, Bevin’s political comeback is living proof of the absolute shininess of another Stumbo gem: “It’s not how many times you get knocked down in a ballgame; it’s how fast you get up.”

Chances are, after baptizing his concession sermon in sour-grapes juice, the Speaker may get a chance to test that advice himself following next year’s election.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at Read previously published columns at